Within Proof of Stake blockchains, validators are required to stake a bond in the chain’s native currency to secure the network. Various primitives have been developed around this concept, including liquid staking tokens (LSTs), restaking platforms, and liquid restaking tokens (LRTs), all aimed at enhancing composability and capital efficiency within these ecosystems. However, this staking infrastructure remains isolated from many blockchains and struggles to scale with the emerging wave of modular blockchains.
Overview
MilkyWay serves as a staking hub for the modular ecosystem, developing a range of products designed to enhance capital efficiency for users while creating new opportunities for token holders and applications alike. As the modular movement gains momentum, the existing staking and re-staking infrastructure is unable to keep pace, preventing users from accessing the same primitives available on other chains and forcing protocols to "reinvent the wheel" continuously.
Additionally, the DeFi ecosystem faces several escalating challenges, particularly in ensuring robust security within an increasingly interconnected blockchain landscape. Bootstrapping validators for a network can be prohibitively expensive, time-consuming, and technically complex, compelling developers to repeatedly refine the same design mechanics before constructing their applications. These are the issues that MilkyWay seeks to address as the staking hub for the modular ecosystem.
Liquid Staking Protocol
MilkyWay's current iteration of products centers around liquid staking tokens (LSTs), primarily for Celestia (milkTIA) and Initia (milkINIT). Since the launch of milkTIA late last year, MilkyWay has attracted nearly 4 million TIA, making it the largest Celestia LST by total value locked (TVL).
Due to the current lack of support for Interchain Accounts—an issue that will be addressed with Celestia’s upcoming Lemongrass upgrade—MilkyWay employs a unique approach behind the scenes. When users deposit TIA on MilkyWay, their stake is bridged to Osmosis via IBC. This stake is then deposited into a staking contract that mints and sends the corresponding amount of milkTIA to the user.
In addition to milkTIA, MilkyWay is developing a liquid staking token for Initia called milkINIT. Similar to milkTIA, milkINIT enables users to stake their INIT tokens to earn staking rewards while allowing holders to leverage their staked assets within the DeFi ecosystem. This functionality is facilitated by the MilkyWay Minitia, a high-throughput rollup that utilizes the Initia L1 for settlement, empowering users to leverage their staked assets throughout the Initia ecosystem.
Modular Restaking
The crypto-economic landscape faces significant challenges due to the underutilization of staked assets, which are frequently locked to secure individual blockchain networks. This fragmentation restricts the potential of these assets, preventing their use across multiple services and chains. As blockchain ecosystems become increasingly interconnected, the inability to leverage staked collateral for broader applications results in inefficiencies and missed opportunities for enhanced security. Furthermore, inadequate security for new networks can be detrimental, rendering them vulnerable to attacks and diminishing trust in their operations.
Another significant issue is the lack of flexibility in existing restaking solutions. Current frameworks are inflexible, compelling decentralized services to adhere to predefined models for asset delegation, slashing, and security protocols. This one-size-fits-all approach restricts customization and hinders services from adapting security solutions to their specific needs. Furthermore, the concentration of staked assets within a few dominant networks limits the diversity and scalability of restaking, thereby reducing the potential for decentralized services to access a wider range of security options.
Architecture
To address these challenges, MilkyWay's restaking layer is founded on several core principles.
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Enhanced AVS Customization: Unlike traditional staking platforms, MilkyWay empowers AVS with complete autonomy over asset allocation and the implementation of network decentralization. Instead of being confined to a predefined framework, AVS now have the opportunity to explore a variety of design choices.
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Extensible Framework: MilkyWay utilizes a dynamic design that allows for the addition of new features and updates over time, enhancing the platform. This approach ensures that the system remains flexible and evolves to meet the customization needs of AVS.
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Permissionless Design: MilkyWay’s architecture allows any AVS to utilize the protocol’s underlying security in a permissionless manner. This model fosters decentralization while equipping developers with the necessary tools to construct their desired network.
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Ease of Use: While MilkyWay offers an extensive range of customization options for AVS, it also simplifies the user experience through convenient presets. This allows AVS to concentrate on their core functionalities while benefiting from the robust security provided by the restaking layer.
Conclusion
As the staking hub for the modular ecosystem, MilkyWay aims to address several critical pain points by introducing a modular, flexible, and asset-agnostic staking and restaking layer. By enhancing the utilization of staked collateral and providing a fully customizable framework for decentralized services, MilkyWay is well-positioned to improve the security and scalability of interconnected decentralized ecosystems. The platform’s commitment to adaptability, autonomy, and continuous evolution makes it a promising solution for AVS looking to optimize their security architecture without sacrificing flexibility.
